Arbitration in Bangladesh

December 17, 2009

Legal Environment In Business | Dreamers Group

AIUBARBITRATION IN BANGLADESH

Arbitration in Bangladesh 2

Legal Environment in Business.

Subject of Term Paper: Corporate Social Responsibility.

Prepared for –

Mrs. Sabrina Zerin.

Faculty Member,

Faculty of Business Administration,

American International University - Bangladesh.

Prepared By –

“Dreamers” Group

Alam Nusrat Jahan.

Legal Environment in Business

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Table of Content

Name of the topic Page#



Letter of Transmittal

November 12, 2009

Sabrina Zerin

Faculty Member,

Faculty of Business Administration,

American International University - Bangladesh.

Subject: Submission of final term paper.

Dear Madam,

With the passage of time we the students of ‘Legal Environment in Business’, section ??, are

standing on the entity of our course completion, hence are finalized with our final group term

paper.

Vividly enough, our report comprise adequate endeavors. But no doubt, our contribution will

be best evaluated on your sharp scale of acceptance & analytical remarks.

Rather in case of any further clarification or elaboration as to our report, we would welcome

the opportunity to consult with you to explore how our findings could best meet your needs.

With best regards,

Alam, Nusrat Jahan.



Acknowledgement

We would like to express our gratitude and indebtedness to our honorable faculty Mrs.

Sabrina Zerin, Faculty member of American International University - Bangladesh (AIUB).

With her inexhaustible guidance, valuable advice, illumination suggestion, continuous

inspiration, constructive criticism and generosity helped us to carry out this term paper

successfully. We would also like to thank those people, who helped us many times by giving

the information, direction, support, help and inspiration to accomplish this report.



Executive summary



Purpose of the Report



Literature Review

This report is about Arbitration Law. To make this report we gathered so many information

and data. Most of the information is collected from the web. We also take information from

some well-known reports, books, and journals. Taking information from Wikipedia is totally

prohibited in this term.

The information are combined in point by point rather than making chapters, and the statistics

of the report is given in the last page.





What is Arbitration?

Arbitration is a process used by agreement of the parties to resolve disputes. In

arbitration, disputes are resolved, with binding effect, by a person or persons acting in a

judicial manner in private, rather than by a national court of law that would have jurisdiction

but for the agreement of the parties to exclude it. The decision of the arbitral tribunal is

usually called an award.

Aristotle (384-322 BC) wrote, "It bids us remember ... to settle a dispute by negotiation and

not by force; to prefer arbitration to litigation -- for an arbitrator goes by the equity of a case,

a judge by the strict law, and arbitration was invented with the express purpose of securing

full power for equity."1

Once an arbitration agreement is entered into for submitting future differences to arbitration,

it is not, necessary to obtain the fresh consent of all the parties for a reference to arbitration at

the time when the dispute actually arises.2

1 http://duhaime.org/LegalDictionary/A/Arbitration.aspx2 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



General Types of Arbitration

Three types of arbitration are contemplated by the Arbitration Act of 1940, namely –

I. Arbitration in the course of a suit.

II. Arbitration with the intervention of the court.

III. Arbitration otherwise than in the course of a suit and without the intervention of

the court. In practice, the last category attracts the maximum number of cases.3

Types of institutional arbitrationArbitration has been used customarily for the settlement of disputes between members of

trade associations and between different exchanges in the securities and commodities trade.

Many contracts contain a standard arbitration clause, referring to the arbitration rules of the

respective organization. Numerous arrangements between the parties in industry and

commerce also provide for the arbitration of controversies arising out of contracts for the sale

of manufactured goods, for terms of service of employment, for construction and engineering

projects, for financial operations, for agency and distribution arrangements, and for many

other undertakings.4

Matters Referable in Arbitration3 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm4 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



Generally speaking, all justifiable matters of a civil nature can be referred to arbitration, but

there are certain exceptions to the rule. For example, it is not permissible to refer a

matrimonial dispute to arbitration, since the issues in such dispute are not only those of fact

or law but also involve questions of public welfare.5

Selection of arbitrators

The matter of selecting arbitrators is an important aspect of the arbitration process, as the

arbitrators' ability and fairness is the decisive element in any arbitration. The general practice

is for both the parties to select an arbitrator at the time the arbitration agreement is

concluded. Selection of arbitrators is also often made by agencies administering commercial

arbitration, under pre-established rules of procedure. These organizations, including various

trade associations, and Chambers of Commerce, maintain panels of expert arbitrators. The

parties may either make their own selection or entrust the appointment of the arbitrators to

the organization.6

Procedure in arbitration

5 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm6 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



The arbitration process is governed by the rules to which the parties refer in the agreement.

In the absence of specific legal rules, the procedure will be determined by the arbitrators.

The arbitration proceeding must be so conducted as to afford the parties a fair hearing on the

basis of equality. The arbitrator generally has the authority to request the parties and third

persons to produce documents and books and to enforce such a request by issuing subpoenas

through court. If a party fails to appear at a properly convened hearing, without showing a

legitimate cause, the arbitrator in most instances will proceed in the absence of the party and

then render an award after investigation of the matter in dispute. The technical rules of

evidence do not apply to arbitrations.

The Arbitration Act adopts the approach, that in the working of an arbitration agreement, the

parties are free to lay down provisions regarding various matters of procedure. But in the

absence of an agreement, the rules contained in the First Schedule to the Arbitration Act,

1940, apply.

An arbitrator can be removed for misconduct. In applying this provision courts generally

follow the wide construction adopted in most commonwealth countries, so that, it is not

merely misconduct involving moral turpitude that attracts this power, but also misconduct of

a technical nature, for example, a breach of the rules of natural justice.

Detailed provision exists for settling the problems that might arise where two or more

arbitrators are contemplated by the arbitration agreement and a difference of opinion arises

between them.

Law to be applied in transnational transactions the statutory law of various countries and the

rules of agencies administering commercial arbitration contain provisions on the form,

certification, notification, and delivery of the award. The arbitrator must comply with these

requirements.7

Arbitration Act in Bangladesh7 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



In Bangladesh, the present law of arbitration is contained mainly in the Arbitration

Act, 1940, there being separate Acts dealing with the enforcement of foreign awards. There

are also stray provisions as to arbitration, scattered in special Acts.

Under the Act of 1940, an arbitration agreement must be in writing, though it need not

be registered. The agreement might make a reference about present or future differences. The

arbitrator may be named in the agreement or left to be designated later, either by consent of

the parties or in some other manner specified in the agreement. Very often, the rules of

prestigious commercial bodies lay down that a person who becomes a member of the

association must accept the machinery of arbitration created or recognized by the rules of the

association. This also amounts to an “arbitration agreement” for the purposes of the

Arbitration Act, 1940.8

8 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm




Bill No.1999.

An Act to consolidate and amend the law relating to domestic

arbitration, international commercial arbitration and enforcement

of foreign arbitral awards. Whereas it is expedient to consolidate

and amend the law relating to domestic arbitration, international

commercial arbitration and enforcement of foreign arbitral

awards;


Introduction of the Bill[Proposal for enacting a Comprehensive Arbitration Act by repealing the Arbitration (Protocol and Convention)

Act, 1937, the Arbitration Act, 1940]

Short title, extent and commencement:

This Act may be called the Arbitration Act, 1999. It extends to the whole of Bangladesh. It

shall come into force.

Definitions:

In this Act, unless the context otherwise requires –

1. “arbitration agreement” means an agreement by the parties to submit to arbitration all

or certain disputes which have arisen or which may arise between them in respect of

a defined legal relationship, whether contractual or not;

2. “arbitration” means any arbitration whether or not administered by a permanent

arbitral institution;

3. “arbitration tribunal” means a sole arbitrator or a panel of arbitrators;

4. “arbitral award” means a decision of the arbitral tribunal on the substance of the

dispute;

5. “Chief Justice” means the Chief Justice of Bangladesh;

6. “court” means the Court of the District Judge and includes such Courts of Additional

Judge as are designated by the Government by notification in the official Gazette to

perform the functions of the Court of the District Judge under this Act;

7. “foreign arbitral award” means an arbitral award made in pursuance of an arbitration

agreement, in the territory of any state other than Bangladesh, but does not include an

arbitral award made in the territory of a specified state;



8. “international commercial arbitration” means an arbitration relating to disputes

arising out of legal relationships, whether contractual or not, considered as

commercial under the law in force in Bangladesh and where at least one of the parties

is-

a. an individual who is a national of, or habitually resident in, any country

other than Bangladesh; or

b. a body corporate which is incorporated in any country other than

Bangladesh; or

c. a company or an association or a body of individuals whose central

management and control is exercised in any country other than Bangladesh;

d. the Government of a foreign country;

9. “legal representative” means a person who in law represents the estate of a deceased

person, and includes any person who intermeddles with the estate of the deceased,

and, where a party acts in a representative character, the person on whom the estate

devolves on the death of the party so acting;

10. “party” means a party to an arbitration agreement;

11. “person” includes any institution or organization or company or association or body

of persons, whether incorporated or not, operating within Bangladesh or outside

Bangladesh;

12. “prescribed” means prescribed by rules framed under this Act;

13. “Specified state” means a state declared by the Government as a specified state.

Scope of Act the law:

1. This Act shall apply where the place of arbitration is in Bangladesh.

2. Notwithstanding sub-section (1) the following sections shall apply even if the place of

arbitration is outside Bangladesh- sections 45 to 47.

3. This Act shall not affect any other law for the time being in force by virtue of which

certain disputes may not be submitted to arbitration.

4. The provisions of this Act shall, subject to the provisions of section 54, apply to all

arbitration proceedings commenced in Bangladesh after the coming into force of this

Act, whether the arbitration agreement in pursuance of which such arbitration



proceedings are commenced, was entered into before or after the coming into force of

this Act.

5. Where the arbitration proceedings were commenced prior to the coming into force of

this Act, the law in force prior to the coming into force of this Act shall, unless the

parties otherwise agree, apply to such arbitration proceedings.

6. Where the Republic is a party to an arbitration agreement, the Republic shall be

bound by the provisions of this Act.

Construction of references:

1. Where this Act, except section 36, leaves the parties to determine a certain issue, that

freedom shall include the right of the parties to authorize any person to determine that

issue.

2. Where this Act-

a. refers to the fact that the parties have agreed or that they may agree, or

b. in any other way refers to an agreement of the parties, that agreement shall

include any arbitration rules referred to in that agreement.

3. Where this Act, other than clause (a) of sub-section (3) of section 35 or clause (a) of

sub-section (2) of section 41 refers to a claim, it shall also apply to a counter-claim,

and where it refers to a defense, it shall also apply to a defense to such counter-claim.

Receipt of written communications:

1. Unless otherwise agreed by the parties, where, under this Act, any written

communication, notice or summons is required to be served on any party or on any

person, such written communication, notice or summons shall be deemed to have

been served on such party or person, as the case may be, if it is delivered to the

addressee personally or at his place of business, or habitual residence or mailing

address; and if none of these can be found after making a reasonable inquiry, such

written communication, notice or summons, as the case may be, shall be deemed to



have been served if it is sent to the address, last known place of business or habitual

residence or mailing address by registered post or by any other means which provides

a record of the attempt to deliver it.

2. The communication, notice or summons, as the case may be, shall be deemed to have

been received on the day it is delivered.

3. The section shall not apply to written communication, notice or summons, as the case

may be, in respect of any proceedings of any judicial authority.

Waiver of right to object:

A party who knows that-

1. any provision of this Act from which the parties may derogate, or

2. any requirement under the arbitration agreement, has not been complied with and yet

proceeds with the arbitration without stating his objection to such non-compliance

without undue delay or, if a time-limit is provided therefore, within such period of

time, shall be deemed to have waived his right to so object.

Jurisdiction of court in respect of matters covered by arbitration Agreement:

Where a party to an arbitration agreement institutes legal proceedings in a Court against

another party to such agreement in respect of a matter agreed to be submitted to arbitration

under such agreement, the Court shall have, notwithstanding any other law for the time being

in force, no jurisdiction to hear and determine such legal proceedings except in so far as

provided by this Act.



Administrative assistance:

In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral

tribunal, with the consent of the parties, may arrange for administrative assistance by a

suitable person.9

9 Proposal for enacting a Comprehensive Arbitration Act by repealing the Arbitration (protocol and Convention) Act 1937, the Arbitration Act, 1940. (http://www.lawcommissionbangladesh.org/reports.htm)



Arbitration Agreement

Form of arbitration agreement:

1. An arbitration agreement may be in the form of an arbitration clause in a contract or

in the form of a separate agreement.

2. An arbitration agreement shall be in writing and an arbitration agreement shall be

deemed to be in writing if it is contained –

a. in a document signed by the parties; or

b. (b) in an exchange of letters, telex, telegrams or other means of

communication which provide a record of the agreement; or

c. in an exchange of statements of claim and defense in which the existence of an

agreement is alleged by one party and not denied by another.

Explanation : The reference in a contract to a document containing an arbitration clause

constitutes an arbitration agreement if the contract is in writing and the reference is such as to

make that arbitration clause part of the contract.

Arbitrability of the dispute:

1. Where any party to an arbitration agreement or any person claiming under him

commences any legal proceedings against any other party to the agreement or any

person claiming under him in respect of any matter agreed to be referred to

arbitration, any party to such legal proceedings may, at any time before filing a

written statement, apply to the Court before which the proceedings are pending to

refer the matter to arbitration, and, thereupon, the Court shall, if it is satisfied that an

arbitration agreement exists, refer the parties to arbitration and stay the proceedings,



unless the Court finds that the arbitration agreement is void, inoperative or is

incapable of determination by arbitration.

2. Notwithstanding that an application has been made under sub-section (1) and that the

legal proceedings are pending before the Court, an arbitration may be commenced or

continued and an arbitral award made.10




Composition of arbitral tribunal

Number of arbitrators:

1. Subject to the provisions of subsection(3), the parties shall be free to determine the

number of arbitrators of an arbitral tribunal.

2. Where no determination referred to in sub-section (1) is made, the number of

arbitrators of an arbitral tribunal shall be three.

3. Unless otherwise agreed by the parties, where the parties appoint an even number of

arbitrators, the arbitrators so appointed shall jointly appoint an additional arbitrator

who shall act as the Chairman of the arbitral tribunal.

Appointment of arbitrators:

1. Subject to the provisions of this Act, the parties shall be free to agree on a procedure

for appointing the arbitrator or arbitrators, as the case may be.

2. Unless otherwise agreed by the parties, a person of any nationality may be appointed

as an arbitrator.

3. In the absence of an agreement referred to in sub-section (1) –

a. in an arbitration with a sole arbitrator if the parties fail to agree on the

arbitrator within thirty days from the receipt of a request by one party from the

other party to so agree, the appointment shall be made, on the application of a

party, by the District Judge, except in the case of an international commercial

arbitration, in which case, the appointment shall be made by the Chief Justice

or any other Judge of the Supreme Court designated by the Chief Justice;

b. in an arbitration with three arbitrators, unless otherwise agreed by the parties,

each party shall appoint one arbitrator, and the two arbitrators thus appointed

shall appoint the third arbitrator who shall be the Chairman of the arbitral

tribunal.



4. If the appointment procedure in sub-section (3) applies and –

a. a party fails to appoint the arbitrator within thirty days of receipt of a request

to do so from the other party; or,

b. the two arbitrators fail to agree on the third arbitrator within thirty days of

their appointment. the appointment shall be made, upon the application of a



or any other Judge of the Supreme Court designated by the Chief Justice.

5. The third arbitrator appointed under clause (b) of sub-section (4) shall be the

Chairman of the arbitral tribunal.

6. If more than one arbitrator are appointed under sub-section (4), the District Judge or

the Chief Justice or any other Judge of the Supreme Court designated by the Chief

Justice, as the case may be, shall appoint one of them to be the Chairman of the

arbitral tribunal.

7. Where, under an appointment procedure agreed upon by the parties-

a. a party fails to act as required under such procedure; or

b. the parties, or the arbitrators, fail to reach an agreement required of them

under such procedure; or

c. a third party, including a person, fails to perform any function assigned to such

third party under such procedure; any party may, unless the arbitration

agreement on the appointment procedure provides other means for securing

the appointment, make application to the District Judge to take necessary

measures towards the appointment of an arbitrator or arbitrators, except in the

case of an international commercial arbitration, in which case, the application

shall be made to the Chief Justice or to any other Judge of the Supreme Court

designated by the Chief Justice and the District Judge or the Chief Justice or

the Judge of the Supreme Court designated by the Chief Justice, as the case

may be, shall make the necessary appointment including that of the Chairman

of the arbitral tribunal.

8. The appointment of arbitrator or arbitrators by the District Judge or the Chief Justice

or the Judge of the Supreme Court designated by the Chief Justice, as the case may

be, under sub-sections (3), (4) and (7) shall be made within sixty days from the date of

making of the applications referred to in those sub-sections.



9. The Chief Justice, or the Judge of the Supreme Court designated by him or the

District Judge, as the case may be, shall, in appointing an arbitrator, have due regard

to any qualifications required of an arbitrator under the agreement between the parties

and to such considerations as are likely to secure the appointment of an independent

and impartial arbitrator.

10. In the case of appointment of a sole arbitrator or third arbitrator in an international

commercial arbitration, the Chief Justice or the Judge of the Supreme Court

designated by the Chief Justice, as the case may be, may appoint an arbitrator of a

nationality other than the nationalities of the parties where the parties belong to

different nationalities.

11. The Chief Justice or the District Judge, as the case may be, may make such procedure

or scheme as may be deemed appropriate for dealing with matters under this section.

12. The decision of the Chief Justice or the Judge of the Supreme Court designated by the

Chief Justice or the District Judge, as the case may be, under sub-sections (3), (4) and

(7) shall be final.

13. The designation of a Judge of the Supreme Court by the Chief Justice for the purposes

of this section may be generally or in respect of a particular case or cases and for such

period as the Chief Justice may specify.

14. The reference to “District Judge” in this section shall be construed as a reference to

the District Judge within the local limits of whose jurisdiction the arbitration

agreement has been made.

Grounds for challenge:

1. When a person is requested to accept appointment as an arbitrator, he shall first

disclose any circumstances likely to give rise to justifiable doubts as to his

impartiality or independence. An arbitrator shall, from the time of his appointment

and throughout the arbitral proceedings, disclose without delay any circumstances

referred t o in sub-section (1) to all the parties and to the other arbitrators, unless they

have already been so informed by him.

2. An arbitrator may be challenged only if –



a. circumstances exist that give rise to justifiable doubts as to his independence

or impartiality, or

b. he does not possess the qualifications agreed to by the parties.

3. A party may challenge an arbitrator appointed by him, or in whose appointment he

has participated, only for reasons of which he becomes aware after the appointment

has been made.

Challenge procedure

1. Subject to sub-section (6), the parties shall be free to agree on a procedure for

challenging an arbitrator.

2. Failing any agreement referred to in sub-section (1), a party who intends to challenge

an arbitrator shall, within thirty days after becoming aware of the circumstances

referred to in sub-section (3) of section 13, challenge the arbitrator before the arbitral

tribunal by a written statement stating the reasons for the challenge.

3. The arbitral tribunal shall decide on the challenge within thirty days from the date of

filing the written statement referred to in sub-section (2) unless in the meanwhile, the

arbitrator challenged under sub-section (2) withdraws from his office or the other

party or parties, if there be more than one, agree to the challenge.

4. A party who is aggrieved by the decision of the arbitral tribunal made under sub-

section (3) may, within thirty days from the date of the decision, appeal to the High

Court Division against the decision.

5. The High Court Division shall decide on the appeal within ninety days from the date

on which it is filed.

6. If a challenge under any procedure agreed upon by the parties or under the procedures

provided in sub-section (2) or in an appeal from an order under the said sub-section is

not successful, the arbitral tribunal shall continue the arbitral proceedings and make

an award.



Termination of arbitrator’s mandate:

1. The mandate of an arbitrator shall terminate –

a. if he withdraws from his office; or

b. if he dies; or

c. if all the parties agree on his termination; or

d. if he is unable to perform the functions of his office or for any reason fails to

act without undue delay; and,

i. he withdraws from his office; or

ii. all the parties agree on the termination of his mandate.

2. If an arbitrator has incurred the disqualifications referred to in clause (d) of sub-

section (1), and, such arbitrator fails to withdraw from his office or all the parties fail

to agree on the termination of hi s office, the District Judge may, upon application by

a party within the prescribed period, remove such arbitrator, except in the case of an

international commercial arbitration in which case, the Chief Justice or any other

Judge of the Supreme Court designated by the Chief Justice, shall, upon application

by a party within the prescribed period, remove such arbitrator: Provided that where

the parties have so agreed, such removal shall be made by the person agreed to by the

parties.

3. Any reference to “District Judge” in this section shall be construed as a reference to



4. Where an arbitrator withdraws from his office or where all the parties agree on the

termination of his mandate under the circumstances referred to in clause (d) of sub-

section (1), it shall not imply acceptance of the validity of any ground referred to in

this clause or in sub-section (3) of Section 13.



Appointment of substitute arbitrator

1. Where the mandate of an arbitrator terminates, a substitute arbitrator shall be

appointed according to the provisions applicable to the appointment of the arbitrator

whose mandate has been terminated.

2. In the absence of any agreement between the parties, the substitute arbitrator shall, at

the discretion of the arbitral tribunal, continue the hearings from the stage at which

the mandate of the arbitrator has been terminated.

3. In the absence of any agreement between the parties, an order or ruling of the arbitral

tribunal prior to the termination of the mandate of an arbitrator shall not be invalid

solely on the ground of such termination.11




Composition of arbitral tribunal

Number of arbitrators:

1. Subject to the provisions of subsection (3), the parties shall be free to determine the

number of arbitrators of an arbitral tribunal.

2. Where no determination referred to in sub-section (1) is made, the number of

arbitrators of an arbitral tribunal shall be three.

3. Unless otherwise agreed by the parties, where the parties appoint an even number of

arbitrators, the arbitrators so appointed shall jointly appoint an additional arbitrator

who shall act as the Chairman of the arbitral tribunal.

Appointment of arbitrators:

1. Subject to the provisions of this Act, the parties shall be free to agree on a procedure

for appointing the arbitrator or arbitrators, as the case may be.

2. Unless otherwise agreed by the parties, a person of any nationality may be appointed

as an arbitrator.

3. In the absence of an agreement referred to in sub-section (1) –

a. in an arbitration with a sole arbitrator if the parties fail to agree on the

arbitrator within thirty days from the receipt of a request by one party from the

other party to so agree, the appointment shall be made, on the application of a


arbitration, in which case, the appoint ment shall be made by the Chief Justice

or any other Judge of the Supreme Court designated by the Chief Justice;

b. in an arbitration with three arbitrators, unless otherwise agreed by the parties,

each party shall appoint one arbitrator, and the two arbitrators thus appointed

shall appoint the third arbitrator who shall be the Chairman of the arbitral

tribunal.



4. If the appointment procedure in sub-section (3) applies and –

a. a party fails to appoint the arbitrator within thirty days of receipt of a request

to do so from the other party; or,

b. the two arbitrators fail to agree on the third arbitrator within thirty days of

their appointment. the appointment shall be made, upon the application of a



or any other Judge of the Supreme Court designated by the Chief Justice.

5. The third arbitrator appointed under clause (b) of sub-section (4) shall be the

Chairman of the arbitral tribunal.

6. If more than one arbitrator are appointed under sub-section (4), the District Judge or

the Chief Justice or any other Judge of the Supreme Court designated by the Chief

Justice, as the case may be, shall appoint one of them to be the Chairman of the

arbitral tribunal.

7. Where, under an appointment procedure agreed upon by the parties –

a. a party fails to act as required under such procedure; or

b. the parties, or the arbitrators, fail to reach an agreement required of them

under such procedure; or

c. a third party, including a person, fails to perform any function assigned to such

third party under such procedure; any party may, unless the arbitration

agreement on the appointment procedure provides other means for securing

the appointment, make application to the District Judge to take necessary

measures towards the appointment of an arbitrator or arbitrators, except in the

case of an international commercial arbitration, in which case, the application

shall be made to the Chief Justice or to any other Judge of the Supreme Court

designated by the Chief Justice and the District Judge or the Chief Justice or

the Judge of the Supreme Court designated by the Chief Justice, as the case

may be, shall make the necessary appointment including that of the Chairman

of the arbitral tribunal.

8. The appointment of arbitrator or arbitrators by the District Judge or the Chief Justice

or the Judge of the Supreme Court designated by the Chief Justice, as the case may

be, under sub-sections (3), (4) and (7) shall be made within sixty days from the date of

making of the applications referred to in those sub-sections.



9. The Chief Justice, or the Judge of the Supreme Court designated by him or the

District Judge, as the case may be, shall, in appointing an arbitrator, have due regard

to any qualifications required of an arbitrator under the agreement between the parties

and to such considerations as are likely to secure the appointment of an independent

and impartial arbitrator.

10. In the case of appointment of a sole arbitrator or third arbitrator in an international

commercial arbitration, the Chief Justice or the Judge of the Supreme Court

designated by the Chief Justice, as the case may be, may appoint an arbitrator of a

nationality other than the nationalities of the parties where the parties belong to

different nationalities.

11. The Chief Justice or the District Judge, as the case may be, may make such procedure

or scheme as may be deemed appropriate for dealing with matters under this section.

12. The decision of the Chief Justice or the Judge of the Supreme Court designated by the

Chief Justice or the District Judge, as the case may be, under sub-sections (3), (4) and

(7) shall be final.

13. The designation of a Judge of the Supreme Court by the Chief Justice for the purposes

of this section may be generally or in respect of a particular case or cases and for such

period as the Chief Justice may specify.

14. The reference to “District Judge” in this section shall be construed as a reference to



Grounds for challenge:

1. When a person is requested to accept appointment as an arbitrator, he shall first

disclose any circumstances likely to give rise to justifiable doubts as to his

impartiality or independence.

2. An arbitrator shall, from the time of his appointment and throughout the arbitral

proceedings, disclose without delay any circumstances referred t o in sub-section (1)

to all the parties and to the other arbitrators, unless they have already been so

informed by him.



3. An arbitrator may be challenged only if –

a. circumstances exist that give rise to justifiable doubts as to his independence

or impartiality, or

b. he does not possess the qualifications agreed to by the parties.

4. A party may challenge an arbitrator appointed by him, or in whose appointment he

has participated, only for reasons of which he becomes aware after the appointment

has been made.

Challenge procedure:

1. Subject to sub-section (6), the parties shall be free to agree on a procedure for

challenging an arbitrator.

2. Failing any agreement referred to in sub-section (1), a party who intends to challenge

an arbitrator shall, within thirty days after becoming aware of the circumstances

referred to in sub-section (3) of section 13, challenge the arbitrator before the arbitral

tribunal by a written statement stating the reasons for the challenge.

3. The arbitral tribunal shall decide on the challenge within thirty days from the date of

filing the written statement referred to in sub-section (2) unless in the meanwhile, the

arbitrator challenged under sub-section (2) withdraws from his office or the other

party or parties, if there be more than one, agree to the challenge.

4. A party who is aggrieved by the decision of the arbitral tribunal made under sub-

section (3) may, within thirty days from the date of the decision, appeal to the High

Court Division against the decision.

5. The High Court Division shall decide on the appeal within ninety days from the date

on which it is filed.

6. If a challenge under any procedure agreed upon by the parties or under the procedures

provided in sub-section (2) or in an appeal from an order under the said sub-section is

not successful, the arbitral tribunal shall continue the arbitral proceedings and make

an award.



Termination of arbitrator’s mandate:

1. The mandate of an arbitrator shall terminate –

a. if he withdraws from his office; or

b. if he dies; or

c. if all the parties agree on his termination; or

d. if he is unable to perform the functions of his office or for any reason fails to

act without undue delay; and,

i. he withdraws from his office; or

ii. all the parties agree on the termination of his mandate.

2. If an arbitrator has incurred the disqualifications referred to in clause (d) of sub

section (1), and, such arbitrator fails to withdraw from his office or all the parties fail

to agree on the termination of hi s office, the District Judge may, upon application by

a party within the prescribed period, remove such arbitrator, except in the case of an

international commercial arbitration in which case, the Chief Justice or any other

Judge of the Supreme Court designated by the Chief Justice, shall, upon application

by a party within the prescribed period, remove such arbitrator. Provided that where

the parties have so agreed, such removal shall be made by the person agreed to by the

parties.

3. Any reference to “District Judge” in this section shall be construed as a reference to



4. Where an arbitrator withdraws from his office or where all the parties agree on the

termination of his mandate under the circumstances referred to in clause (d) of sub-

section (1), it shall not imply acceptance of the validity of any ground referred to in

this clause or in sub-section (3) of Section 13.



Appointment of substitute arbitrator:

1. Where the mandate of an arbitrator terminates, a substitute arbitrator shall be

appointed according to the provisions applicable to the appointment of the arbitrator

whose mandate has been terminated.

2. In the absence of any agreement between the parties, the substitute arbitrator shall, at

the discretion of the arbitral tribunal, continue the hearings from the stage at which

the mandate of the arbitrator has been terminated.

3. In the absence of any agreement between the parties, an order or ruling of the arbitral

tribunal prior to the termination of the mandate of an arbitrator shall not be invalid

solely on the ground of such termination.12




The arbitrator and the court

Challenges to the process of arbitration are not uncommon. A party may claim, for example,

that no valid arbitration agreement came into existence, because the person signing the

agreement had no authority to do so or that a condition precedent to arbitration had not been

fulfilled. More often, the validity of an arbitration is contested on the ground that the specific

controversy is not covered by the agreement. In such cases, the question whether the

arbitrator has authority to deal with the conflict is usually determined by a court.

Challenges before the courts against the award cannot be excluded by agreement of the

parties, since the fairness of the arbitration process as a quasi judicial proceeding has to be

maintained by the legal system.

Challenges before the court are, however, confined to specific grounds and specific matters.

A review of the award by a court will not generally deal with the arbitrators decisions as to

facts or with his application of the law. The jurisdiction of the court is thus restricted. The

arbitration process must be the end and not the beginning of litigation.13

Filing the award13 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



An award of the arbitrator must be filed in the court and a decree obtained in terms thereof. The decree so obtained can be executed, like any other decree of the court. However, the court may, instead of confirming the award, remit it to the arbitrator, modify it or set it aside for the specified causes. Most of the orders passed by a court under the provisions of the Arbitration Act, 1940 in this regard are subject to appeal. 14

Enforcement of arbitral awards

Enforcement of arbitral award.- Where the time for making an application for setting aside an arbitral award under section 42 has expired, or such application having been made, it has been refused, the arbitral award shall be enforced by execution by the Court under the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court.

Explanation : In this section, the expression, "Court", means the Court within the local limits of whose jurisdiction the arbitral award has been finally made and signed.15

Competent Court

14 ? http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm15 Proposal for enacting a Comprehensive Arbitration Act by repealing the Arbitration (protocol and Convention) Act 1937, the Arbitration Act, 1940. (http://www.lawcommissionbangladesh.org/reports.htm)



The court having jurisdiction under the Arbitration Act 1940 is the court in which a suit on the matter under dispute could be instituted.

Provisions have been enacted in the Act to deal with questions concerning the cost of arbitration and the procedure to be followed by the arbitrators regarding filing of the awards. In case of difference of opinion between an even number of arbitrators, the parties can provide for an umpire. Generally, most of the provisions applicable to arbitrators apply, with necessary modifications, to umpire also.16

16 http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/arbitration_law_in_bangladesh.htm



Bangladesh Council for Arbitration Recommended

Arbitration Clause

The parties are free to construct their arbitration clause considering the nature of the contract and refer all or certain disputes which have arisen or which may arise to the BCA. The Bangladesh Council of Arbitration, however, recommends to the parties desirous of making reference to arbitration by the Bangladesh Council of Arbitration to use any of the following arbitration clauses in writing in their contracts:

a. "Any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Rules of Arbitration of the Bangladesh Council of Arbitration and the Award made in pursuance thereof shall be binding on the parties."

b. Or, “All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the Bangladesh Council of Arbitration by one or more arbitrators appointed in accordance with the said Rules.”17

17 http://www.jurisint.org/doc/html/cla/en/2006/2006jiclaen2.html



Conclusion



Bibliography

http://duhaime.org/LegalDictionary/A/Arbitration.aspx

http://www.vakilno1.com/saarclaw/bangladesh/arbitrationlaw/

arbitration_law_in_bangladesh.htm

Proposal for enacting a Comprehensive Arbitration Act by repealing the Arbitration

(Protocol and Convention) Act, 1937, the Arbitration Act, 1940

(http://www.lawcommissionbangladesh.org/reports.htm

http://www.jurisint.org/doc/html/cla/en/2006/2006jiclaen2.html



Report Statistics




Arbitration in Bangladesh

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